Look for value when selecting a bankruptcy attorney
If you’re considering bankruptcy as an option for dealing with mounting debt, and are in the process of looking for an attorney, you may want to stop and take a moment to read Oscar Wilde. No, I don’t suggest looking through Wilde’s plays, books and poems because he too suffered from financial problems that led to bankruptcy. I suggest reading Wilde because of what he had to say about finding value and how it applies to hiring an attorney. Oscar Wilde is famously quoted as saying:
A cynic is a man who knows the price of everything and the value of nothing
These words ring true in many contexts and instruct us to consider value as well as price. For example, if you’re wondering how you’re going to afford paying for a bankruptcy attorney, it may be tempting to shop around for the lowest possible fee. This strategy would surely make sense if all bankruptcy law firms were created equal. In that case, why pay $2,000 in attorneys fees when you could get the same level of service for $500? Unfortunately, it doesn’t work this way. You’re better off with the best, not the cheapest attorney. For many people, hiring a bankruptcy lawyer is their first experience as a consumer of legal services. Their lack of experience in the marketplace prevents them from identifying value. John C. Colwell, an experienced bankruptcy attorney in San Diego, had this to say in response to an inquiry from a potential client seeking the lowest possible legal fees:
Thank you for your inquiry. Shopping for a bankruptcy attorney by price is a ‘loss leader’ in our view.Sure, you may ‘save’ a few hundred here or there, but at what actual cost? What if you employ an inexperienced attorney that is not familiar with the local legal culture, and who presents the forms improperly? What if you hire an attorney that doesn’t represent you at all but rather farms out the work to another attorney or worse yet, a ‘supervised’ paralegal? What if the complexity of the new bankruptcy laws make your otherwise ‘simple’ case, much more difficult due to some nuanced change in the law that an inexperienced attorney doesn’t spot as an issue? Or maybe it’s a risk worth taking for the lowest common dollar. Not in our view. Having prefaced with all this, we will say we are NOT the cheapest, nor are with he MOST expensive. Our consultations are free and with no obligation. Please have your family member come into the office so that we may consult in person and determine the apparent benefits, risks and costs.”
Paying for a higher level of service can minimize risk and protect the discharge
John’s response does an excellent job of identifying the value in paying a slightly higher attorney fee: minimizing risk. Even in a basic consumer bankruptcy case, there are quite a few things that can go wrong. For example, a trustee or a creditor may object to one of your claimed exemptions or file a complaint seeking denial of your discharge. The trustee may select your case for a 2004 exam or may ask you a series of pointed questions during a 341 meeting. You may need to file an amendment to your schedules or reopen your case at some point to seek sanctions against a creditor who continues to contact you even after your bankruptcy discharge. If you paid money back to family or friends before filing for bankruptcy, the trustee may file a lawsuit seeking to recover those funds as a preferential payment. Bankruptcy court is a serious place and there is real value in hiring attorneys who are familiar with the court, the trustees and the law. Sure, it is possible to hire the cheapest possible attorney and have your case go smoothly. But with your financial future on the line, it may be best to listen to Oscar Wilde rather than the highway billboard.
Image credit: Steven D. Hammond
Walter Metzen is a Board Certified Specialist in Consumer Bankruptcy with over 28 years of experience. He’s represented more than 20,000 bankruptcy clients in and around Detroit where his firm is located. View his profile here.